According to the Deloitte Property Index, Belgium has the most affordable housing in Europe. That is a surprising conclusion. A lot has to do with the method used by Deloitte. Business AM spoke to real estate agent Philippe Dewaele, managing director at Dewaele Vastgoed, who qualifies the research.
Listen to the full conversation with Philippe Dewaele here:
In the news: Belgium rises from third to first place in Deloitte’s ranking of most affordable housing.
Explained: The index looks at how many years it takes you on average to get one gross salary with which you can buy a house of 70 square meters. There is criticism of that method.
- Belgium tops the list with one average of 4.3 years. If you want to buy a house in Norway, number two, you have to save for 4.7 years.
- By comparison, Slovakia is at the bottom of the list with 14.1 years.
Gross or net?
The criticism: Calculating averages based on gross wages would not be representative.
- Private individuals pay for their home with their net salary, and not with the gross salary. Belgium has a high tax burden big gap between gross and net wages. In practice, this means that it is still not easy for private individuals to buy a house.
- This is also what real estate agent Philippe Dewaele says: “Since the beginning of last year, there has been a slowdown, especially in new construction projects. That contradicts the official statistics. The hype is over, and we have transitioned back from a seller’s market to a buyer’s market.”
- The standard notes that we in Belgium on the other hand many measures that reduce the tax burden, such as meal vouchers and payroll cars. Belgians also pay less interest on mortgages, as we read in the Deloitte study.
Fewer real estate investors
- Investing in real estate is declining, Dewaele sees: “Because of the rising interest rates the market has fallen. Investing in real estate is an alternative to returns on your savings account. That hasn’t been the case for years. But now that market has seriously cooled down.”
- “Tenants on the residential market are the biggest victims of this. There are more tenants and less new supply on the rental market, because less is being invested by investors. That tension is seriously increasing. Rents are skyrocketing.”
- The Deloitte report confirms this: with a rent of 14 euros per square meter, Brussels ranks 26 in a comparison with 66 European cities. Dublin appears to be the most expensive city. Paris, Oslo, London and Amsterdam follow.
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